What strategy is referred to when it is advised to "pay yourself first"?

The strategy of "paying yourself first" primarily emphasizes the importance of prioritizing personal savings before addressing other expenses. This approach suggests that individuals should allocate a portion of their income to savings right off the bat, rather than waiting to see what is left over after other expenses are accounted for. By doing so, individuals can consistently build a financial safety net, which is essential for achieving long-term financial goals, such as retirement, emergency funds, or larger purchases.

In the context of the options, building savings captures the essence of the philosophy behind paying yourself first. It encourages individuals to treat savings as an essential bill that must be paid regularly, fostering a habit of financial responsibility and foresight. This practice helps ensure that savings grow over time, enabling financial stability and growth.

While reducing monthly expenses, budgeting for entertainment, and investing in stocks are all valid financial strategies, they do not directly encapsulate the core philosophy of "pay yourself first." The emphasis of this strategy is distinctly on savings rather than managing expenses or making investments, which aligns perfectly with the notion that one's first financial priority should be to save for their future.